Ed Balls attempts to launch a tax-cutting drive this weekend with a call for a
two-year stamp duty holiday for first-time buyers aimed at kick-starting the
housing market.

The shadow chancellor’s move, which would affect property sales of up to £250,000, is designed to increase pressure on George Osborne as he battles to control Britain’s deficit and faces demands for tax cuts from his party’s Right wing.

In an interview with The Sunday Telegraph on the eve of Labour’s conference in Manchester, Mr Balls declares that he is unable to promise, two and a half years before the next general election, to reverse any of the Coalition’s specific spending cuts in what is designed to be a tough message to his own party.

He also robustly rejects claims of rifts between him and Ed Miliband, asserts that his sole political ambition is to become chancellor in a Labour government and denies that he is a bully — saying he hopes his colleagues see him as “nurturing”.

In his surprisingly cramped Commons office, Mr Balls is clearly relishing Mr Osborne’s recent discomfort. He ascribes most of this to the Chancellor’s decision to cut the top rate of income tax from 50p to 45p in the Budget.

Meanwhile, the crisis in the eurozone has blown the Coalition’s plans for wiping out the deficit off course. “With every month which goes past the position is getting worse,” Mr Balls says. “We will have a very difficult inheritance… and that’s why I’ve been absolutely clear with my shadow cabinet colleagues, and all of them accept [this], that we can’t make spending commitments now.”

This sounds like a rebuke to Harriet Harman, Labour’s deputy leader, who last week declared that the “scale and pace of their [Coalition] deficit reduction is self-defeating” and that her party needed to be in a different place at the next election. Mr Balls denies any rebuke and cites Miss Harman as one of an unlikely quartet of allies who, he claims, all agree that taxes must come down now.

“Any tax cut which helps families, boosts spending power, gets jobs being created and gets our deficit down is better than nothing,” he says.

“But not the top rate of tax, I think the top rate of tax cut is probably one tax cut which doesn’t have that effect. What George Osborne has managed to do is an astonishing political achievement. He’s actually managed to unite Liam Fox, Boris Johnson, me and Harriet Harman — all agreeing that we need tax cuts now.”

His call for a two-year stamp duty holiday on purchases by first-time buyers of properties worth up to £250,000 is, he says, designed as a stimulus to the economy as a whole rather than just the housing market. He insists it is a fully costed measure and that he will use his conference speech tomorrow to spell out how it would be funded.

The previous Labour government introduced this measure during its last months in office, but the scheme has run out. “Bring it back,” demands Mr Balls. “We can do something to help aspirational men and women who want to get on the housing ladder and are finding it really hard at the moment.”

This battle for the votes of the “striving” classes will clearly rage on until at least the next general election. Labour’s claim that the party is “on your side” will be a key theme this week, one which can also be seen in policies announced this weekend to scrap Ofgem, the energy regulator, in favour of a tougher watchdog and to reform the complex pensions industry.

Mr Balls and Mr Miliband also plan to get tough on banks by insisting on the full implementation of the report by Sir John Vickers that called for the total separation of the banks’ retail businesses from their investment arms.

“The problem at the moment is that the Government is watering down that divide and therefore going backwards on banking reform,” Mr Balls says.

“And as Ed’s going to say, that’s not good enough. We need the letter and spirit of that report implemented.”

Banking reform was one of the areas where, it was reported, a damaging rift had developed earlier this year between the two Eds. Mr Balls insists that is not the case and that they are not turning into a new version of Tony Blair and Gordon Brown.

“If there were ever any issues, then Ed and I, as we have done for 20 years, we sit down and talk it through, and we work it out. We don’t do it through intermediaries, and we don’t do it through the newspapers, and we don’t do it through argument or dispute.”

Mr Balls is not inclined to address how Labour would cut the deficit or fund public services at a time of continuing hardship. He makes much of a plan for a review of all public spending that Labour would perform immediately if elected but he is unwilling to go into detail.

Neither is the shadow chancellor ready to meet the demands of the Tories — and some in his own party — for an apology on behalf of the previous Labour government for presiding over what was a record peacetime deficit. “I think that what people want to know, is where this country’s going,” he says

What of his own political ambitions? After telling The Sunday Telegraph last year that he no longer wants to be Labour leader he now insists his sole wish is to be chancellor under Mr Miliband. “I want to deliver a Budget which can get Britain back on the right long-term course,” he says.

On the bullying accusations he is forthright. “There’s nothing more despicable and weak than a bully,” he says. “I’ve always been willing to argue things out with people who were stronger and more powerful than me. But people who I’ve worked with closely, people who’ve been members of my teams, I hope, would think of me as somebody who is supportive and nurturing.

“That means sometimes challenging people – but only in a way that is positive and constructive.

“If you’ve got a surname like mine, and you’ve stood, aged 10 or 11 when the football team coach read out the team, and seen all the parents laughing when your name was called out, not to mention the kids, I know what that feels like … I don’t think you ever think that being a bully is smart or good.”